Epic Fail: Where Four State Health Exchanges Went Wrong

Oregon, Minnesota, Maryland and Massachusetts are still struggling to get back on track after a disastrous launch that makes HealthCare.gov look successful by comparison.

A Maryland Health Connection insurance exchange poster hangs in the waiting room during an education and enrollment event in Silver Spring, Md., on Dec. 7, 2013. Maryland joins three other states that are still struggling to get back on track after a disastrous launch that makes HealthCare.gov look successful by comparison. (Andrew Harrer/Bloomberg via Getty Images)

Much has been written (and will
continue to be written) about the spectacular failure of health insurance
exchanges in Minnesota, Massachusetts, Oregon and Maryland—all blue
states that support the Affordable Care Act.

All were woefully unprepared for their
Oct. 1 launch, and unlike HealthCare.gov, the federal marketplace, they are
still having trouble getting back on their feet. As a result, enrollment in
those four states has lagged behind other states, including many that actively oppose
the health law.

The New York Times recently reported on how problems in these states could give
Republican candidates an opening. “Last month, the Republican National
Committee filed public-records requests in Hawaii, Maryland, Massachusetts,
Minnesota and Oregon seeking information about compensation and vacation time
for the exchange directors, four of whom have resigned. All five states have
Democratic governors whose terms end this year. Three of them — Gov. Neil
Abercrombie of Hawaii, Gov. Mark Dayton of Minnesota and Gov. John Kitzhaber of
Oregon — are seeking re-election,” The Times reported.

One common element emerging in the
coverage of these exchanges is that at least some state employees knew they
were heading for disaster but didn’t take action early enough to remedy it. All
the states have blamed some, if not all, of their problems on outside tech
contractors. Here’s a sampling of what has been reported in each state.

Oregon

The Oregonian newspaper has done a
great job chronicling the unfolding disaster with Cover Oregon. The state is the only one in which no one
has been able to enroll using the website. In an article
last month, the newspaper reported that a technology analyst at Oregon's
Department of Administrative Services warned last May that managers at the
exchange were being "intellectually dishonest" in claiming it would
be ready Oct. 1.

As the Oregonian set forth in its findings:

The project's significant flaws were
well documented dating back to November 2011. Multiple independent analysts
repeatedly raised questions aboutpoor management along with strongdoubts
that it could be operational by the Oct. 1, 2013 deadline.

Cover Oregon leaders wavered between
despair and an almost evangelical enthusiasm that they could complete the site.
In the end they charged ahead, piloting an unfinished, largely untested
exchange project right up to the Oct. 1 go-live date with no backup plan ready
to go.

Senior officials in Gov. John
Kitzhaber's office and elsewhere read at least some of these warnings but took
no significant steps to intervene, apparently after being convinced by others
the project was on track.

A key official in the massive IT
project took steps to silence the critics. The Oregon Health Authority last
January withheld payment from the company hired to monitor the project,
claiming its persistent criticism was inaccurate and inflammatory.

The director of Cover Oregon left on medical leave in December. The Oregonian also has a good piece
comparing Oregon’s failures with the successes of Kentucky, whose exchange has
been lauded.

Minnesota

Blame is being spread around in Minnesota, where the MNsure exchange is sputtering and its call center is unable to keep up with demand. As news site MinnPost reported last month: “The vendors are
blaming the state. Gov. Mark Dayton and state officials are blaming the private
companies who built the faulty technology, and MNsure
leaders are quick to point out that they weren’t around when controversial
decisions were made. Republican lawmakers, meanwhile, are saying that the
governor needs to take responsibility for the project.”

MinnPostreported that
despite their efforts to blame vendors, state officials were responsible for
key decisions:

Newly
released contract documents suggest the state and MNsure
leaders had a more direct role in the health exchange’s many missteps than they
have publicly acknowledged.

In
recent weeks, Gov. Mark Dayton and MNsure officials
have increased their criticism of vendors, blaming the private technology
companies for some of the underlying problems and glitches with the health
exchange’s operation.

However,
in early May, the state of Minnesota in effect took over responsibility from
its lead contractor, Maximus Inc., for constructing MNsure’s
technical infrastructure, according to contract amendments released to MinnPost by MNsure.

The
new documents show that the exchange staff quietly made a significant change to
its key contract for building MNsure —
just months after making major revisions to the timeframe and size of the
project.

Dayton later
said he was unsure if senior MNsure staff were keeping him apprised of the serious issues with the exchange as soon as they came up.

In many ways, Massachusetts should
have been a leader in setting up its own exchange. After all, its 2006 health
reform law signed by then-Gov. Mitt Romney has been cited as the model for Obamacare. But the state’s exchange, the Massachusetts
Health Connector, has fumbled.

The Boston Herald reported last month that, “State officials overseeing the Health
Connector website knew as early as February 2013 — some nine months
before launch — that parts of the $69 million Obamacare
gateway would probably be delayed, public records obtained by the Herald last
night revealed.”

Massachusetts officials knew in July, three
months before the launch of the state’s ill-fated health insurance website,
that the technology company in charge was far behind on building the site and
that there was “a substantial and likely risk” it would not be ready, according
to a state official’s memo.

The website launched on Oct. 1 was incomplete
and riddled with errors that frustrated consumers, blocked some from getting
coverage, and required the state to move tens of thousands of people whose
applications could not be processed into temporary insurance programs.

The head of the Massachusetts Health Connector
Authority, which runs the insurance marketplace, was copied on the July memo.
But the executive director, Jean Yang, and her staff never told the Connector
board during its monthly public meetings that the project was off track,
according to meeting minutes.

The Globe reported in a separate story how an untold number of people who “applied for
Connector plans without financial assistance have not gotten coverage, because
their payments were lost or somehow never linked to their accounts.”

John J. Monahan, a columnist for the Worcester
Telegram & Gazette, put it like this last weekend:

Massachusetts'
universal health care program was the model for Obamacare.
And now, it seems, the Obamacare website fiasco has
been modeled by Massachusetts.

The state contracted with the same software company that messed up the launch
of the Obamacare website to redesign its Health
Connector website for people to buy insurance. It was scheduled to be working
Oct. 1 to renew insurance for Jan. 1. It still isn't working.

Maryland

The Maryland Health Connection, like the
exchanges in other states, knew well in advance that it wasn’t ready to launch,
but the problems weren’t fixed in time.

The Washington Post reported last month how “senior state officials failed
to heed warnings that no one was ultimately accountable for the
$170 million project and that the state lacked a plausible plan for how it
would be ready by Oct. 1.”

Over
the following months, as political leaders continued to proclaim that the
state’s exchange would be a national model, the system went through three
different project managers, the feuding between contractors hired to build the
online exchange devolved into lawsuits, and key people quit, including a top
information technology official because, as he would later say, the project
“was a disaster waiting to happen.”

The repeated warnings culminated days before
the launch, with one from contractors testing the Web site that said it was
“extremely unstable” and another from an outside consultant that urged state
officials not to let residents enroll in health plans because there was “no
clear picture” of what would happen when the exchange would turn on.

Within moments of its launch at noon Oct. 1,
the Web site crashed in a calamitous debut that was
supposed to be a crowning moment for Maryland officials who had embraced President
Obama’s Affordable Care Act and pledged to build a state-run
exchange that would be unparalleled.

Weeks later, the Baltimore Sun’s Meredith Cohn wrote
a piece about just how much trouble she personally had trying to enroll:

For a chunk of two recent days, I tried to buy insurance on the Maryland health exchange.

My editors asked me to do this because Gov. Martin O'Malley recently told a
national television audience that the "website is now functional for most
citizens."

They wanted to know what "functional" meant, especially after hearing stories from consumers
about a glitch-prone website created under the Affordable Care Act for the
uninsured and underinsured. Marylanders have described frozen screens, lost
information, error messages and even mistaken identity.

My own enrollment took 5 hours and 22 minutes over two days, two calls to the
exchange's call center, seven times entering my personal information, two
computers and two web browsers.

Maryland’s exchange director resigned in December. Last week,
Maryland Gov. Martin O’Malley signed
a law that would provide a backup method for hundreds of residents to
get coverage effective Jan. 1 if they can show that they tried unsuccessfully
to get coverage from the exchange.

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